Lump Sum
Lump sum when possible. Not all projects lend themselves to a lump sum setup.
Lump sum is by far the quickest and most efficient way to increase profit when implemented correctly. If you’re estimating an hourly project just be sure your rate is tied to the liability of the job. Setting 4 corners of a high rise building foundation is a lot more risk to you and the company than setting 4 corners of a single family house. Charge for what its worth.
The way it should work:
A potential customer requests an estimate for some work:
It borders a long time client and we need to ask for permission from them to access the job which is kinda a joint venture:
When asking they say they want us to do it for them, not the potential customer:
No request for a cost,,,,,,,,,,that’s how it should work!!!!
Lump sum=mucho dinero. I usually take a beating on a couple of jobs per year but the other killings more than make up for it.
I do have a few long time clients that are billed hourly but for most of them I do more than surveyor duty such as engineering coordination,
usps approvals, landscape plans, erosion control plans etc., which cranks it back up to lump sum profit margins.
Lump sum almost exclusive. In business in same rural county for 45 years. Non recording state, but have a fairly large exclusive file of 10,000 boundary surveys performed over the years. All surveys either originally surveyed in State Plane, or converted later, and I have built a state plane master Autocad drawing with aerial imagery which displays all my surveys and monuments, along with highway/street rights of way (all displayed on a 55″ monitor). Makes job research easy.
Presently, at least 90% of all current work is resurveys of previous jobs. If priced by the hour, the advantage of owning exclusive records would be eliminated. No other competitor has these records, and for a competitor to do the same job it requires a lot more time than it takes me. This may sound selfish, but I am now able to benefit from all those years of scraping by when it was taking me a lot of work hours, problem solving, researching and chopping lines in order to build those files.
By charging lump sum, I am able to receive what the market will bear. If charging by the hour I would need probably $300-$500 per hour. (For example, say a 20 acre survey is worth $2,000. Since for me it would be something I had already surveyed, I might be able to do it in 4 hours. If I did T&M and charged $150 per hour I would be billing only $600 for that 20 acres survey, while a competitor would be getting $2000 for the same job. If I wanted to get the same $2000 for this job on T&M basis I would have to charge $500 per hour. I don’t need that reputation.)
When getting started in this business I figured this would probably have to be my retirement plan. It’s worked out for me as I enjoy what I do, and plan to work till I no longer have good health. One of my mentors was H.O. Peters, the first Florida surveying society President, and I would make night time visits to his home in the orange groves of Weirsdale, Florida, when he was in his 80’s and get his advise on surveys I might be having problems with. Mr. Peters office was in his home living room, and he would always have a current project taped down on his stand up height drafting board. He never talked about the day he would quit and do nothing. Also, with 2 sons that are licensed and 2 grandsons currently enrolled in the University of Florida Geomatics program, my work enables me to have the feeling of being an active participant in the work force.
That is a great example of the difference between recording and non-recording states.
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